From the latest BOJMinutes:
Members shared the recognition that economic activity in the euro area had
receded slowly. A few members pointed out that the negative effects had been spreading even to core countries such as Germany. As for the outlook, members shared the view that the euro area economy would likely still lack momentum for recovery on the whole as fiscal austerity measures would continue to be implemented for the time being, particularly in peripheral countries.
That's about right. Last week I looked at the EU and its four largest countries (see here, here, here, here and here). The region is still a mess. While there are some positive developments (German manufacturing and services indices are increasing, Italy's manufacturing sector's problems are easing), three of the four largest economies (France, Spain and Italy) are still either in a recession (Spain and Italy) or barely printing any growth (France). And the region as a whole is still enthralled with the idea of expansionary austerity, which will continue to hurt growth as pointed out above.
While the ECB continues to say the EU will pull out of the recession starting in the 3Q12, there is little evidence of that now.
